Authorities have ordered a Hunan-based dairy firm to shut down production and recall more than 31 tonnes of an infant milk powder that was found to be tainted with a carcinogenic agent, in the latest safety scare involving the industry.

The order targeting Ava Dairy was made this week by Hunan authorities and the General Administration of Quality Supervision, Inspection and Quarantine.

Guangzhou's department of commerce announced on Friday that five batches of the company's Nanshan Bywise baby formula were contaminated with toxic aflatoxin during a regular safety inspection, The Southern Metropolis News reported yesterday.

Aflatoxins are naturally occurring toxins produced by fungus and often found on spoiled food. They can lead to liver damage and cancer.

It was the second recall in the mainland dairy industry in less than six weeks. On June 14, dairy giant Yili Group recalled some baby formula products after abnormal levels of mercury were found.

In a statement posted on its website late on Monday, Ava Dairy said the contamination was the result of cows eating mouldy feed.

The company said the problematic batches were produced between July and December last year and had been sold in Hunan and Guangdong. The statement did not say whether the contaminated milk was also used to produce other dairy products.

Ava said it would comply with the authorities' orders and recall all of the products in question, while halting production and distribution. Samples of all dairy products in stock would also be taken and sent to third parties for testing.

'This incident has created distress and pain for the majority of our customers, and we would like to state our sincerest apologies,' Ava Dairy said in its statement.

No one at the company was available for further comment yesterday.

Wei Ronglu, deputy director of the Dairy Association of Western China, said: 'The scandal will, of course, hit the credibility of the industry and of authorities.'The Ava scandal is just the tip of the iceberg for the muddled industry. Now is the worst time for the industry. You see that the safety standards of dairy products are even lower than they were in the 1980s.'

Mother-to-be Zhang Zongbao, a migrant worker from Shanxi province who lives in Shenzhen, said: 'I will never purchase any domestic brands of baby milk powder, as this news just makes me sick. I will try my best to save money and buy safe foreign brands of powdered milk for my baby, even though I earn only 3,000 yuan [HK$3,644] a month.'

Mainland-made dairy products have come under widespread scrutiny since a scandal in 2008 involving formula tainted with an industrial additive called melamine, which killed six children and caused ailments such as kidney problems in 300,000 others. Among the 22 dairy firms involved in the scandal was Sanlu, a huge state-owned dairy firm that was subsequently shut down.

Melamine was illegally added to products to make protein levels seem higher. All affected brands were ordered to be recalled, and companies were ordered to destroy any tainted milk powder.

However, scandals over contaminated milk powder have continually resurfaced since then, while mainland authorities have reiterated pledges to set things right in the industry.